All of Paulson's funds are down as he continues to short "European sovereign bonds and buy credit default swaps on the region's debt," Bloomberg reported.

Paulson sent his investors a letter yesterday, explaining why his bets would eventually work, saying all that has been done to mend the crisis thus far has been a temporary fix. Here's what the letter said (via Bloomberg):

'The plans announced at the end of June will prove insufficient in solving the structural problems of the euro zone,' Paulson wrote in the letter. 'Like the passage of the Greek bailout plan in March, the plans' impact on the markets will prove temporary and short-lived. These plans do not solve the productivity gap among euro-zone countries, current account deficits, government deficits, unemployment, and capital outflows.'